Milk bottlesBritish farming ministers have agreed to push for farmers and processors to back a new code of practice when they meet tomorrow after days of heightened protests over milk price cuts.

Crunch talks between the two sides are set to go ahead at the Royal Welsh Show in Powys as the stalemate over the 2p a litre reduction continues.

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Westminster's Jim Paice and his Welsh and Scottish counterparts Alun Davies and Richard Lochhead are united in pressing for both sides to back a new code on milk contracts, according the Department for Environment, Food and Rural Affairs. That would be subject to a review after 12 months to ensure it worked in practice.

Mr Paice will also hold a meeting with the big supermarkets later in the week to get them to sign up to a voluntary code. It is understood the ministers believe all sides must "get round the table" to avert further blockades and demonstrations.

In a joint statement the ministers said: "The dairy sector is a key part of our agricultural industry and all the Governments in the UK are determined that it should have a profitable and sustainable future. In responding to the current situation, industry needs to address both the immediate issue of the price paid for milk and also the structures and mechanisms that will help underpin the long term viability of the sector."

In recent days farmers have staged the latest in a wave of demonstrations to show their anger over being paid less for their milk than it costs to produce it. Supporters of protest group Farmers for Action (FFA) are continuing a third night of protests with demonstrators targeting Robert Wiseman Dairies. Farmers were outside the processor's plants in Bridgwater, Somerset; Market Drayton, Shropshire and Droitwich, Worcestershire.

The Co-operative and Morrisons supermarket chains have responded to the protests by announcing rises in premiums paid for milk to farmers.

FFA is warning that cuts in the price paid to suppliers by dairy processors, combined with rising feed costs, could force hundreds of dairy farmers out of business. Its supporters have vowed to continue protests outside milk processing plants until they receive a better deal. The FFA said about 750 of its members turned out on Friday to demonstrate outside the Robert Wiseman dairy in Droitwich Spa, Worcestershire, and another plant at Foston, Derbyshire.

Meanwhile, from August 1 Asda is increasing the premium it pays to its dairy farmers by 2p per litre.

The increase means the supermarket giant's 272 Dairylink farmers will continue to be paid 27.5p per litre for the milk they produce - offsetting a cut previously announced by milk processing company Arla. The additional premium is, on average, equivalent to around £30,000 a year for a Dairylink farmer and means the price they are paid will not reduce on August 1 as previously feared.